Why is the UK immune from bankruptcy?

[scooterscot]

Low rates contributed - BoE should have increased rates to stop house bubble at least 10 years ago, there was a limit to how far LTV ratios would go even in this crazy economy.

Yes I agree. About 5% contribution. The other 95% housing bubble crisis belongs to an unregulated banking system that allowed unimaginable risk taking. And still today it continues.

[AtW]

Yes I agree. About 5% contribution. The other 95% housing bubble crisis belongs to an unregulated banking system that allowed unimaginable risk taking. And still today it continues.

When debt is cheap this tulip happens - Greenspan dropped rates to stimulate real estate market after .com crash, later this cheap cash was exported to other countries - that's not 5% contribution, that's 90% (money were too cheap so they went into commodities, real estate etc).

Regulation failed just like it did in the past - this system simply can't be regulated as those guys will find ways around, however when you get high interest rates to make debt EXPENSIVE it can control the system - there will always be desperate people who need to borrow, but at least it won't carry systemic risk.

[scooterscot]

When debt is cheap this tulip happens - Greenspan dropped rates to stimulate real estate market after .com crash, later this cheap cash was exported to other countries - that's not 5% contribution, that's 90% (money were too cheap so they went into commodities, real estate etc).

Regulation failed just like it did in the past - this system simply can't be regulated as those guys will find ways around, however when you get high interest rates to make debt EXPENSIVE it can control the system - there will always be desperate people who need to borrow, but at least it won't carry systemic risk.

Sounds defeatist.

A society laden with debt is not attractive. Much rather have the debt of Brunei and live in well actually Brunei might be quite nice...

[AtW]

Sounds defeatist. A society laden with debt is not attractive.

It's solution to the problem - debt should be very expensive, if it's cheap then a lot of people can "afford" (in a very short term) to get lots of money to spend it on tat that does not last. A lot of current consumer products are poor quality that don't last long - they are not designed to, that's in large part why they are so cheap, something that killed off western manufacturing.

[EternalOptimist]

It's solution to the problem - debt should be very expensive, if it's cheap then a lot of people can "afford" (in a very short term) to get lots of money to spend it on tat that does not last. A lot of current consumer products are poor quality that don't last long - they are not designed to, that's in large part why they are so cheap, something that killed off western manufacturing.

then maybe the problem is not an oversupply of cheap money, but a shortage of willpower in the would-be borrowers

[scooterscot]

A lot of current consumer products are poor quality that don't last long - they are not designed to, that's in large part why they are so cheap, something that killed off western manufacturing.

How many billions of years is a light bulb designed to last for? An normal incandescent light bulb is designed to have an MTBF of 1000 hours. Now they've been making those thing through several recessions when the cost of debt was high and low.

On some naval ships I've seen bulbs removed that were installed 25 years ago at launch. I was amazed. I asked how??? Guy said, oh we operate them 60% of rating. Nothing to do with cheap debt.

[AtW]

then maybe the problem is not an oversupply of cheap money, but a shortage of willpower in the would-be borrowers

It's a lot easier to stop oversupply of cheap money...

[scooterscot]

then maybe the problem is not an oversupply of cheap money, but a shortage of willpower in the would-be borrowers

Yes. The general public are dumb creatures just they way Gordon liked them.

[AtW]

How many billions of years is a light bulb designed to last for?

Normal light bulb uses too much power - that means real money are shifted to those who happened to take control of natural resources in their God forsaken countries (Norway is one of few decent exceptions).

I am talking about poor quality tulip like shoes that won't last more than few months

Maybe it's just for those with big feet

[EternalOptimist]

It's a lot easier to stop oversupply of cheap money...

ah, i forgot. you are a top-down type of guy. a controller tsar.

I notice you didnt disagree with the sentiment though, so whats wrong with a bit of education ?